Australian energy giant AGL has deferred the closure of two of its Australian power plants in a bid to avoid blackouts when the mercury soars.

Key Points:

AGL has deferred the closure of power plants in NSW and South Australia to avoid summer blackouts

Federal Energy Minister Angus Taylor has been welcomed as a short term measure to ensure power supplies

The Nature Conservation Council says the move will contribute further to climate change

In 2015, AGL said its 50-year-old Liddell Power plant in the New Wales Hunter Valley would shut at the end of 2022.

The company has told the Australian Energy Market Operator that the closure has been put back to April 2023 to ensure the reliability of power supplies during the 2022-2023 summer months.

The first Liddell turbine will still close in 2022, but an independent engineering assessment has found its remaining three are fit to continue for the extra four months.

In its announcement to the Australian stock exchange, the company has also announced plans to continue operating its gas-fired Torrens A power plant in South Australia beyond its expected closure date.

AGL had previously announced plans to mothball two of its four units by November this year, but that has been extended by almost a year.

It says its third and fourth turbines at the South Australian plant will shut in 2021 and 2022, respectively.

Torrens A was originally scheduled to shut in 2016, but after statewide blackouts in September that year its closure was deferred.

Mr Taylor has also stressed that the government is still pushing for coal-fired power generation to stay in the energy mix in the years to come.

"There is more to be done," Mr Taylor said.

"We want to see existing coal and gas generation stay in the market, running at full tilt."

Mr Fitzgibbon says the deferred closure at Liddell will give AGL more time to progress its renewable power plans.

"Every additional month we can secure out of Liddell is a bonus," he said.

"But it doesn't give us much time, and we really do need to get on with that additional investment in pumped hydro and in battery storage.

"Sadly the closure of Liddell is still inevitable and we need to be ready for it, and I'm urging AGL to accelerate their investment and to get those new facilities going in the Upper Hunter.

"No criticism of AGL — these things don't happen quickly and I'm pleased we now have an additional year, and therefore our hope has improved of getting those investments up and running in time to replace Liddell."

'Risky and irresponsible'

The Nature Conservation Council has slammed the announcement as "deeply disappointing", and said AGL is contravening its own greenhouse gas policy.

But CEO Kate Smolski says the situation is entirely the fault of the government.

"AGL's decision to extend the closure date for its Liddell coal-fired power station is a direct consequence of the Federal and State Governments' mismanagement of energy policy," CEO Kate Smolski said.

"Four more months of operation by three turbines at Liddell will pump 2 million tonnes of carbon pollution into the atmosphere, contributing further to dangerous climate change.

"Liddell is NSW's most unreliable and most polluting power station … relying on it to limp though summer is risky and irresponsible."

"It was outages at two Liddell units that contributed to NSW running out of electricity in February 2017.

"This highlights the urgent need for NSW to go it alone and develop its own climate and energy policy to ensure we play our part in slashing climate pollution to keep global heating to a manageable level."

AGL looks to hydro and gas

In recent years AGL has progressed plans to replace its ageing Liddell coal-fired power station with pumped hydro and gas generation.

AGL recently signed an agreement to undertake an engineering feasibility study for a 250-megawatt pumped hydro project utilising a former mine void near Muswellbrook in the Hunter Valley.